Updated 9:04 pm, Friday, October 12, 2012

Names of patients who have passed are carved into stones as a rememberance near a fountain.

Names of patients who have passed are carved into stones as a rememberance near a fountain.

Photo: Michael Short, Special To The Chronicle

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The house, which helps children and their families, struggles with insurers that don't know how to label it for billing purposes.

The house, which helps children and their families, struggles with insurers that don't know how to label it for billing purposes.

Photo: Michael Short, Special To The Chronicle

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Justin Fowler, 16, who has cystic fibrosis, hangs out in his room at George Mark Children's House.

Justin Fowler, 16, who has cystic fibrosis, hangs out in his room at George Mark Children's House.

Photo: Michael Short, Special To The Chronicle

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A picture window with bench seating is seen in one of the halls of the George Mark Children's House in San Leandro, which is the country's first and only stand-alone pediatric palliative care center. Monday October 1st, 2012. less

A picture window with bench seating is seen in one of the halls of the George Mark Children's House in San Leandro, which is the country's first and only stand-alone pediatric palliative care center. Monday ... more

Photo: Michael Short, Special To The Chronicle

George Mark Children's House reopens

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San Leandro's George Mark Children's House, the nation's first and only freestanding center for children with life-limiting illnesses, had no model to follow when it fell $1.8 million in debt and had to find a way to survive.

The center, which shut down for six months in 2010 while it regrouped under a new business plan, had a tough time getting health insurers to pay for its expenses because it didn't fit into any neat category or reimbursement code.

George Mark offers residential care for children with conditions so severe that they are not expected to live to adulthood. Sometimes that means short-term help after a child is discharged from a hospital or when families need a break. Only two similar homes exist in this country - one in Phoenix and another in Baltimore.

Breaking the rules

It offers end-of-life services, but is not an official hospice. On-site nursing services are always available, but it's not a certified skilled nursing center because it welcomes pets, has no set visiting hours and basically breaks the rules. That has made getting reimbursement from insurers or government programs difficult.

"Because it had never been done before, the bureaucrats in the world did not know how to deal with it. The regulators didn't know how to regulate it and the insurance companies didn't know how to reimburse for it," said Diane Taylor of Oakland, a donor and volunteer who has been involved with George Mark since its inception in 2004.

Back in the black

Now, two years after it reopened in the wake of drastic staffing cuts and a shift in focus, the house is back in the black - ending this second fiscal year with $15,000 in the bank. The goal is not to make money, but to have enough to cover costs.

Because George Mark provides care regardless of ability to pay, the center has relied almost exclusively - upward of 95 percent - on donations. But philanthropic giving slowed with the lagging economy, pushing the center into insolvency.

The founders called on Peter Farber-Szekrenyi, a health care administrator with more than 35 years of experience in running and turning around large hospitals and health systems.

"It was very clear to me ... that the business plan we had, which basically depended 99 percent on philanthropy, was not working well in a down economy," he said.

In April 2010, Farber-Szekrenyi closed George Mark for six months and then cut the $9 million annual budget to $4.4 million by firing most of its staff and paying nurses on a per diem basis.

But the real challenge was figuring out how to get reimbursed for what it does. Medi-Cal did not compensate for services although the program covers more than half the children who come to George Mark. So the staff negotiated with the state-federal program for a way to get repaid.

Farber-Szekrenyi placed a greater emphasis on providing transitional care - the type of help children need after they are discharged from a hospital. He said the center continues to provide all types of care, but transitional services are more likely to be covered.

Saves on costs

The center also has secured a handful of contracts with private insurance companies and is trying to negotiate with more carriers.

"It's a long road, even though it clearly benefits everybody - the patients, the insurance companies and us," Farber-Szekrenyi said, citing an analysis that showed receiving care at the center costs about 60 percent less per day than in a hospital.

George Mark has just nine rooms - patients never share, but each room has a day bed for families and guests - and families can stay in one of its two suites. But the center often struggles with getting doctors to refer their patients for care because some see it as giving up.

"We don't do death well in this country. And we certainly don't like to talk about dying children," said Ken Sommer, George Mark's director of development. "For a doctor, if you have this image of George Mark as a hospice, you may not want to give a referral for transitional care."

'Like another home'

Justin Fowler was one of the first patients to receive transitional care at the center when it reopened in October 2010. The gregarious 16-year-old from Vallejo has struggled with cystic fibrosis, a life-threatening disease that causes mucus to build up in the lungs and leads to frequent infections, and has spent several stays at the center over the past two years to stabilize his health.

"The first time it was really hard to be out of the hospital but not at home," he said. "Now it's kind of like another home."

Jennifer McKay-Weber of Concord spent the last 48 days of her son's life at the center last summer with her husband and their 4-year-old daughter. Noah, just four months old when he died, had a rare childhood disease that caused acute liver failure, which led to a brain hemorrhage.

She described her family's time at the center as "painfully beautiful."

"It is like a home for us. It really did become that in this dark, dark moment we were living," she said.

She and her husband continue to receive bereavement services through George Mark. "It's still our home. It's a sanctuary," she said.

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